MichiganVotes Bills

Michigan data privacy legislation exempts governments

Government services could gain an advantage over private businesses

A new Michigan Senate bill would create state-specific privacy protections for consumer information, exempting state and local governments, including municipal broadband service, from its requirements.

Senate Bill 659, dubbed the “personal data privacy act,” imposes certain requirements on businesses and others that collect personal information. It also creates a mechanism by which the state attorney general can finance investigations into alleged wrongdoing.

The 37-page bill, proposed by Sen. Rosemary Bayer, D-Keego Harbor and several Democratic co-sponsors, grants consumers the right to opt out of targeted advertising and to receive copies of their personal data, among other things. Consumers could enforce their rights through lawsuits, and the state attorney general could levy fines for noncompliance, which would go into a new account in the state treasury that the attorney general could draw on.

The legislation would not apply to various kinds of information that are currently subject to other laws, such as HIPPA, a federal health care law. It also grants an exemption to school districts, community colleges, and intermediate school districts, as well as cities, townships and counties.

“Protecting the privacy rights of consumers is important, but consumers also benefit from being able to engage in online commerce and from sharing their personal data with their doctors, insurers, and financial institutions,” Ted Bolema, a member of the Mackinac Center Board of Scholars and expert in regulation and antitrust, told CapCon.

“In its present form, Senate Bill 669 appears to give consumers very few protections for their data that they don’t already have under federal privacy laws and existing Michigan consumer protection laws,” Bolema said.

Bolema suggested that the exemption for government agencies may be a way for governments to avoid having to disclose consumer information when they comply with open records requests. “But exempting them means that municipal service providers would have a competitive advantage over private providers who would have to comply with burdensome requirements,” he said.

Examples of government-run enterprises that compete with local businesses include internet service providers, electric utilities and land banks.

Senate Bill 659 is in the Senate Committee on Finance, Insurance, and Consumer Protection.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.